One of India's major industries and a significant source of new jobs is the travel and tourism sector, also referred to as tour operators and agencies. Over 10,500 start-ups are expected to have been founded by 2020, which indicates that the number of new businesses and start-ups in India is increasing rapidly. This faster growth rate will have a significant positive impact on the travel and tourism industry, which is predicted to contribute more than $11,512.9 billion to our GDP by 2027. As a result, everyone in this area anticipates a promising future in the coming 10 to 20 years. It's time to dive deep into license details for a travel agent!
Who is a Travel Agent?
As per the laws, a Licensed Travel Agent is any individual or organization who helps make arrangements related to:
- Tickets for travel whether it be via rail, road, air, or waterways,
- Accommodation around the country or abroad
- Customized tour and entertainment packages
- Any tourism-related services.
Travel agent employment is anticipated to grow by 5% between 2020 and 2030, which is slower than the average for all occupations. Over the next 10 years, there are expected to be, on average, 7,500 new jobs for travel agents, despite the modest growth in employment. The majority of those openings are anticipated to be caused by the need to replace workers who change careers or leave the workforce due to retirement.
Governmental Acknowledgment
The Additional Director-General of the Ministry of Tourism must recognize the person in order for them to be a legitimate agent in India, and this recognition is initially good for five years. Before receiving this recognition, an inspection and preliminary report must be submitted and reviewed by the relevant Regional Director and five-person TAAI team. To have the recognition renewed or extended after the initial period, a request must be made.
Following the submission of the request, the relevant Regional Director and one TAAI member will review the supporting documentation before extending the recognition for an additional 5 years. Before processing the renewal, the Travel Trade Division will also review the submitted documents. The entire process will be finished in about 60 working days.
Business Entity Choices for Travel Agency:
Selecting the appropriate business entity is a critical decision for a travel agency, as it determines legal and financial implications. Sole proprietorship, partnership, Limited Liability Partnership (LLP), and private limited company are common choices. A sole proprietorship offers simplicity but lacks legal separation from the owner, while partnerships involve shared responsibility. LLP combines limited liability with a partnership structure, and a private limited company provides a separate legal identity with limited liability. Consider factors like ownership structure, liability, and scalability when making this crucial decision.
GST Registration for the Travel Business:
GST registration is mandatory for travel businesses operating in India. This process involves visiting the GST portal, providing essential details, and completing the verification process. GST registration streamlines tax compliance, allowing travel agencies to avail of input tax credits. Compliance with GST regulations is vital to avoid penalties and ensure the smooth operation of a travel business.
GST Payable by Air Travel Agent:
Air travel agents are required to pay Goods and Services Tax (GST) on their services. The applicable GST rate varies based on the type of travel service and the class of accommodation. Compliance with GST regulations is crucial for air travel agents to avoid legal issues and financial penalties. Understanding the specific GST liabilities associated with air travel services ensures the seamless functioning of the travel agency.
Trademark Required for the Travel Business:
Securing a trademark is a crucial step for a travel business to protect its brand identity and establish a distinctive market presence. Conducting a thorough trademark search helps ensure that the chosen trademark is unique and not already in use. The application process involves filing with the appropriate trademark authorities, and successful registration provides legal protection against unauthorized use of the travel agency’s brand. This safeguards the business from potential legal disputes and reinforces its unique identity in the competitive travel industry.
Conditions that Must be Meet
A duplicate form must be submitted along with the required paperwork along with the application for recognition in the format specified.
- The agency must have at least Rs. 3.00 lakh in the capital.
- A certificate from a Chartered Accountant regarding the agency’s capital investment is required, along with audited balance sheets.
- The agency must have the International Air Transport Association’s approval, or it must be a General or Passenger Sales agent for any airline that has received IATA approval.
- Before applying, the agency had to have been in operation for at least a year.
- In India, the business must have an office that is neat, clean, and well-maintained. In locations higher than 1000 meters above sea level, the office must be at least 100 square feet.
Employee Requirements
- The agency must be owned or run by an experienced and well-qualified full-time member.
- Great emphasis must be laid, on building efficient and effective communication skills.
- It must have at least four employees, with at least one employee having a degree in Tourism and Travel Management from an establishment accredited by the AICTE.
- In case, the staff is exceptionally experienced and has worked for at least three years under an IATA or UFTA agency; then the academic criteria may be relaxed.
Fees and Taxation
- The agency must have filed its IT return for the year in which it is applying.
- A fee of INR 3000 must be paid while applying for recognition.
Miscellaneous
- The Certificate of Approval must always be displayed in the agency’s office.
- In all matters relating to the recognition and renewal of licenses, the decision taken by the Ministry of Tourism will be final.
- The Ministry of Tourism also has the right to cancel a license if it deems the step necessary.
- However, a Show Cause Notice will be issued before doing so, to inform the company about the impending decision.
Become a Travel Agent with the Government of India’s approval!
Although it is not required, registration as a Government of India-approved travel agent is advantageous and gives the travel agent recognition. The scheme for the recognition of travel agencies (TA) aims to promote high standards of service and quality in the tourism sector. The travel agent must meet certain requirements regarding capital invested, staff employed, maintenance of minimum office space, and other requirements in order to be recognised by the Government of India. Additionally, submit an application to the Ministry of Tourism in the appropriate format to become a Travel Agent recognised by the Government of India.
Conclusion:
There are many opportunities for new business owners to start out as travel agents. If you are one among them and looking for an expert to take you through the process, then all you need is to get connected with the Vakilsearch team. Since it is the number one legal service provider in India, experts like VS will help you with the registration process that is truly legal for you.
FAQs
Do you need a license to be a travel agent in India?
Yes, a license is required to operate as a travel agent in India. Obtain necessary permissions from regulatory authorities.
How can I check if a travel agent is licensed?
Verify a travel agent's license by checking with the appropriate government or regulatory body overseeing travel agencies.
Who are Authorised travel agents for the Govt of India?
Authorized travel agents recognised by the Government of India are listed by relevant government departments.
Who are the best travel agents in India?
Research and reviews can help identify reputable travel agents. Look for industry awards and customer feedback.
How can I get an IATA license in India?
To obtain an IATA license in India, apply directly to the International Air Transport Association (IATA) following their specific procedures.
How can I verify my travel agency in India?
Verify your travel agency's credentials through official government websites or regulatory bodies overseeing travel agencies.
How do I report a fake travel agent?
Report a fake travel agent to local authorities or consumer protection agencies. Provide details of the fraudulent activity.
What is a travel agent true number?
A travel agent's true number may refer to their official license or registration number issued by regulatory authorities.
What are the rules for travel agents?
Travel agents must comply with licensing requirements, adhere to consumer protection laws, and follow industry regulations.
What is the travel agent rate?
Travel agent rates vary based on services offered, commission structures, and agreements with airlines, hotels, and other service providers. Rates depend on the specific business model and industry relationships.
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